REG-Unisys Corp: Final Results
13/02/2019 07:05
Unisys Announces 4Q18 and Full-Year 2018 Results; Full-Year Total Company
Revenue Grows for First Time since 2003, Company Achieves or Exceeds Guidance
on All Guided Metrics
BLUE BELL, Pa., Feb. 12, 2019 --
2018:
* Total revenue grew 3.0 percent year over year; Total non-GAAP adjusted
revenue((5)) grew 80 basis points year over year
* Services revenue grew 2.5 percent year over year; Services non-GAAP adjusted
revenue grew 2.1 percent year over year
* Services backlog((4)) was up 13 percent year over year to $4.8 billion, the
second-consecutive year of growth in year-end backlog
* Company achieved or exceeded guidance for all guided metrics for the
third-consecutive year, since reinstating providing guidance three years ago
* Net income increased to $75.5 million versus a net loss of $65.3 million in
2017; Adjusted EBITDA((11)) margin expanded to 15.3 percent, up 50 basis
points year over year
* Diluted earnings per share was $1.30 versus a diluted loss per share of
$1.30 in 2017; non-GAAP diluted earnings per share((12)) was $1.95 versus
$2.49 in 2017 (year-over-year decline driven principally by unusually high tax
benefits in 2017)
Unisys Corporation
(https://c212.net/c/link/?t=0&l=en&o=2373395-1&h=2874775406&u=http%3A%2F%2Fwww.unisys.com%2F&a=Unisys+Corporation) (NYSE:
UIS) today reported fourth-quarter and full-year 2018 financial results. "We
are pleased to have grown revenue for the full year 2018 for the first time
since 2003. Our results were driven by our strategy of a focused industry
go-to-market approach and using security to differentiate our offerings," said
Unisys Chairman, President and CEO Peter A. Altabef. "Our expertise in cloud
migration and infrastructure modernization and managed digital workplace
services which contributed to our growth in 2018, is aligned with ongoing
market demand for these services."
Summary of Full-Year 2018 Business Results
Company:
Revenue grew 3.0 percent year over year as reported and on a
constant-currency((3)) basis to $2.83 billion, marking the first full year of
revenue growth since 2003. Non-GAAP adjusted revenue was up 80 basis points
year over year to $2.76 billion.
Operating profit margin expanded 660 basis points year over year to 10.1
percent. Non-GAAP operating profit((6)) margin expanded 20 basis points year
over year to 8.9 percent, even with lower Technology revenue year over year,
as expected due to a lighter ClearPath Forward(®) renewal schedule.
Net income for 2018 was $75.5 million, versus a net loss of $65.3 million in
2017. Diluted earnings per share was $1.30, versus a diluted loss per share of
$1.30 in 2017. Non-GAAP diluted earnings per share was $1.95 versus $2.49 in
the prior year. 2017 included tax benefits of $50.4 million, or $0.69 per
diluted share, driven by unusually high tax credits, principally related to
the enactment of the Tax Cut and Jobs Act.
Adjusted EBITDA for 2018 increased 4.3 percent to $422.5 million, and Adjusted
EBITDA margin expanded to 15.3 percent, up 50 basis points year over year.
2018 operating cash flow was $73.9 million versus $166.4 million in 2017. 2018
adjusted free cash flow((14)) was $62.0 million, versus $210.8 million in
2017. Adjusted free cash flow was expected to decline year over year due in
part to outperformance on this metric in 2017. However, the year-over-year
decline was larger than expected, largely driven by increased capital
expenditures related to new public sector deals and timing of cash collection
due to the U.S. Federal Government shutdown, and was impacted by working
capital at the company's UK-based check-processing joint venture.
2018 Total Contract Value((1)) (or "TCV") grew 27 percent year over year, and
new business TCV grew 51 percent.
Services:
2018 Services revenue grew 2.5 percent year over year (or 2.4 percent in
constant-currency) to $2.39 billion, marking the first full year of revenue
growth for the segment since 2006. Services non-GAAP adjusted revenue grew 2.1
percent year over year to $2.38 billion. Services backlog grew 13 percent year
over year to end 2018 at $4.8 billion, representing the second-consecutive
year of growth in year-end backlog. New Services contracts in implementation
stage can impact margins, as costs are incurred ahead of revenue being
recognized, and this was the case during 2018. As a result, Services gross
profit margin was 16.0 percent, down 80 basis points year over year, and
Services operating profit margin was 2.8 percent, flat year over year.
Non-GAAP adjusted Services gross profit((7)) margin was 15.6 percent, down 120
basis points year over year, and non-GAAP adjusted Services operating
profit((8)) margin was 2.4 percent, down 40 basis points year over year.
Technology:
2018 Technology revenue was $438.7 million, up 6.1 percent year over year (or
6.5 percent in constant currency). Non-GAAP adjusted Technology revenue for
2018 was $385.7 million, down 6.7 percent year over year, as expected due to
the ClearPath Forward renewal schedule. Technology gross profit margin for
2018 expanded 1000 basis points year over year to 69.4 percent. Technology
operating profit margin was up 1250 basis points year over year to 51.3
percent. Non-GAAP adjusted Technology gross profit((9)) margin for 2018
expanded 600 basis points year over year to 65.4 percent. Non-GAAP adjusted
Technology operating profit((10)) margin was up 620 basis points year over
year to 45.0 percent. Due to this margin expansion (which was largely driven
by a revenue mix that was more software than hardware), non-GAAP adjusted
Technology operating profit grew year over year, despite lower non-GAAP
adjusted Technology revenue.
Summary of Fourth-Quarter 2018 Business Results
Company:
Revenue grew 2.2 percent year over year to $760.9 million (up 4.8 percent in
constant-currency). Non-GAAP adjusted revenue was up 1.3 percent year over
year to $754.6 million.
Operating profit margin was 9.5 percent, down 150 basis points year over year.
Non-GAAP operating profit margin was 11.9 percent, down 400 basis points year
over year. These margin declines were largely due to a lighter Technology
renewal schedule and were also impacted by new business in implementation
stage in Services.
Net income for the fourth quarter was $25.0 million, versus $50.5 million in
the fourth quarter of 2017. Diluted earnings per share was $0.41, versus $0.76
in the fourth quarter of 2017. Non-GAAP diluted earnings per share was $0.97
versus $1.75 in the prior-year period. The fourth quarter of 2017 included tax
benefits of $29.3 million, or $0.41 per diluted share, driven by unusually
high tax credits, principally related to the enactment of the Tax Cut and Jobs
Act.
Adjusted EBITDA for the fourth quarter was $134.5 million, and Adjusted EBITDA
margin was 17.8 percent, both down year over year due to the same issues that
impacted non-GAAP operating profit margin.
Fourth quarter operating cash flow was $151.3 million versus $202.7 million in
the fourth quarter 2017. Fourth quarter adjusted free cash flow was $123.8
million, versus $207.4 million in the fourth quarter of 2017, largely driven
by timing of cash collection due to the U.S. Federal Government shutdown and
working capital at the company's check-processing joint venture, as noted
above. At December 31, 2018, the company had $605 million in cash and cash
equivalents.
TCV was down 49 percent year over year in the fourth quarter, and new business
TCV was down 51 percent, due to uncharacteristically high growth of these
metrics in the fourth quarter of 2017.
Services:
Services revenue grew 5.6 percent year over year (or 8.3 percent in
constant-currency) to $625.5 million, marking the third-consecutive quarter of
revenue growth for the segment. Services non-GAAP adjusted revenue grew 4.5
percent year over year to $619.2 million. As was the case for the full year
2018, new Services contracts in implementation stage also impacted the fourth
quarter of 2018. Services gross profit margin was 15.0 percent, down 310 basis
points year over year, and Services operating profit margin was 2.1 percent,
down 270 basis points year over year. Non-GAAP adjusted Services gross profit
margin was 14.1 percent, down 400 basis points year over year, and non-GAAP
adjusted Services operating profit margin was 1.1 percent, down 370 basis
points year over year. These margins were also impacted by increased costs
associated with certain existing contracts.
Technology:
Technology revenue in the fourth quarter was $135.4 million, down 11.0 percent
year over year (or 9.1 percent in constant currency) driven by the ClearPath
Forward renewal schedule, which was expected to be lighter than in the
prior-year period. Technology gross profit margin for the fourth quarter
expanded 560 basis points year over year to 75.5 percent. Technology operating
profit margin was up 120 basis points year over year to 58.6 percent. The
improvements to Technology margins were driven in part by a higher mix of
software revenue in the quarter.
Key Fourth-Quarter Contract Signings:
In the fourth quarter, the company entered into several key contracts in each
of its sectors including the following:
* U.S. Federal: Unisys was selected by the Office of the Comptroller of the
Currency (OCC), an independent bureau of the U.S. Department of the Treasury,
to provide secure cloud services for the agency's employees under a blanket
purchasing agreement worth up to $69 million. Under the agreement, Unisys will
implement and validate identity and access management and cloud access broker
services so the OCC can securely operate critical applications in the cloud.
* Public: A U.S. state government awarded Unisys a contract for Stealth™
software and comprehensive security services. Following the consolidation of
50 of the state's data centers, Unisys is helping the state to implement
uniform security across its newly integrated data center and is using
microsegmentation to segregate agency servers and applications co-located on a
single physical network.
* Commercial: MASkargo, the cargo division of Malaysia Airlines, will further
enhance the digital transformation of its business using two secure
cloud-based Unisys Digistics™ digital logistics solutions to make the
airline's cargo services available to a wider global freight market and
provide customers with industry-leading visibility across the shipment
lifecycle.
* Financial Services: Unisys renewed its agreement with a major Brazilian bank
to provide application services support for the bank's contract management
services, which support 70 percent of the total mortgage market in Brazil.
Representative 2018 and 2019 Awards and Accolades:
* Gartner: Unisys is a Leader in the Magic Quadrant for Managed Workplace
Services, North America (ranked highest of all firms profiled for "ability to
execute")
* ISG: Unisys is a Leader in Managed Digital Workplace Services (Global, USA,
and UK evaluations)
* NelsonHall Research: Unisys is a Leader in Cloud Advisory, Assessment and
Migration Services
* HfS Research: Unisys is a Leader in the Blueprint for ServiceNow Services
* HfS Research: Unisys is a Top 10 provider of Infrastructure and Enterprise
Cloud Services
* Awarded "Best Supply Chain Architecture" for one of the modules within
Digistics cargo logistics solution and "Best Software Architecture in IT
Products" for AirCore(®), the company's advanced passenger services solution,
at the ICMG Global Enterprise Architecture Excellence Awards
Conference Call
Unisys will hold a conference call today at 5:00 p.m. Eastern Time to discuss
its results. The listen-only webcast, as well as the accompanying presentation
materials, can be accessed on the Unisys Investor website at
www.unisys.com/investor. Following the call, an audio replay of the webcast,
and accompanying presentation materials, can be accessed through the same
link.
((1)) Total Contract Value – TCV is the estimated total contractual revenue
related to contracts signed in the period including option years (U.S. Federal
contracts only) and without regard for cancellation terms. New business TCV
represents TCV attributable to new scope for existing clients and new logo
contracts.
((2)) Annual Contract Value – ACV represents the revenue expected to be
recognized during the first twelve months following the signing of a contract
in the period.
((3)) Constant currency – The company refers to growth rates in constant
currency or on a constant currency basis so that the business results can be
viewed without the impact of fluctuations in foreign currency exchange rates
to facilitate comparisons of the company's business performance from one
period to another. Constant currency is calculated by retranslating current
and prior period results at a consistent rate.
((4)) Services Backlog – Services Backlog is the balance of contracted
services revenue not yet recognized, including only the funded portion of
services contracts with the U.S. Federal government.
Non-GAAP and Other Information
Although appropriate under generally accepted accounting principles ("GAAP"),
the company's results reflect revenue and charges that the company believes
are not indicative of its ongoing operations and that can make its revenue,
profitability and liquidity results difficult to compare to prior periods,
anticipated future periods, or to its competitors' results. These items
consist of certain portions of revenue, post-retirement and cost-reduction and
other expense. Management believes each of these items can distort the
visibility of trends associated with the company's ongoing performance.
Management also believes that the evaluation of the company's financial
performance can be enhanced by use of supplemental presentation of its results
that exclude the impact of these items in order to enhance consistency and
comparativeness with prior or future period results. The following measures
are often provided and utilized by the company's management, analysts, and
investors to enhance comparability of year-over-year results, as well as to
compare results to other companies in our industry.
((5)) Non-GAAP adjusted revenue – In 2018, the company's non-GAAP results
reflect adjustments to exclude certain revenue. This includes revenue from
software license extensions and renewals which were contracted for in 2017 and
properly recorded as revenue at that time under the revenue recognition rules
then in effect (ASC 605). Upon adoption of the new revenue recognition rules
(ASC 606) on January 1, 2018, and since the company adopted ASC 606 under the
modified retrospective method whereby prior periods were not restated, the
company was required to include $53 million in the cumulative effect
adjustment to retained earnings on January 1, 2018. ASC 606 requires revenue
related to software license renewals or extensions to be recorded when the new
license term begins, which in the case of the $53 million is January 1, 2018.
The company has excluded revenue and related profit for these software
licenses in its non-GAAP results since it has been previously reported in
2017. This is a one-time adjustment and it will not reoccur in future periods.
However, in its 2018 quarterly disclosures, the company is required to report
what its financial statements would have been if it had not adopted ASC 606.
The $53 million is included in those adjustments. There are additional
adjustments being made, but they do not represent previously recorded revenue.
Those adjustments represent other differences between ASC 605 and ASC 606,
principally extended payment term software licenses and short-term software
licenses both of which are recorded at the inception of the license term under
ASC 606 but were required to be recognized ratably over the software license
term under ASC 605. Additionally, the company's non-GAAP results include
adjustments to exclude certain revenue and related profit relating to
reimbursements from the company's check-processing JV partners for
restructuring expenses included as part of the company's restructuring
program.
((6)) Non-GAAP operating profit - The company recorded pretax post-retirement
expense and pretax charges in connection with cost-reduction activities and
other expenses. For the company, non-GAAP operating profit excluded these
items. The company believes that this profitability measure is more indicative
of the company's operating results and aligns those results to the company's
external guidance which is used by the company's management to allocate
resources and may be used by analysts and investors to gauge the company's
ongoing performance. During 2018, the company included the non-GAAP
adjustments discussed in (5) herein.
((7) ) Non-GAAP adjusted Services gross profit – During 2018, the company
included the adjustments discussed in (5) herein.
((8)) Non-GAAP adjusted Services operating profit – During 2018, the
company included the adjustments discussed in (5) herein.
((9) ) Non-GAAP adjusted Technology gross margin – In the first quarter of
2018, the company included the ASC 606 adjustment discussed in (5) above.
((10)) Non-GAAP adjusted Technology operating margin – In the first
quarter of 2018, the company included the ASC 606 adjustment discussed in (5)
above.
( (11)) EBITDA & adjusted EBITDA – Earnings before interest, taxes,
depreciation and amortization ("EBITDA") is calculated by starting with net
income (loss) attributable to Unisys Corporation common shareholders and
adding or subtracting the following items: net income attributable to
noncontrolling interests, interest expense (net of interest income), provision
for income taxes, depreciation and amortization. Adjusted EBITDA further
excludes post-retirement expense, cost-reduction and other expense, non-cash
share-based expense, and other (income) expense adjustment. In order to
provide investors with additional understanding of the company's operating
results, these charges are excluded from the adjusted EBITDA calculation.
During 2018, the company included the adjustments discussed in (5) herein.
((12)) Non-GAAP diluted earnings per share - The company has recorded
post-retirement expense and charges in connection with cost-reduction
activities and other expenses. Management believes that investors may have a
better understanding of the company's performance and return to shareholders
by excluding these charges from the GAAP diluted earnings/loss per share
calculations. The tax amounts presented for these items for the calculation of
non-GAAP diluted earnings per share include the current and deferred tax
expense and benefits recognized under GAAP for these amounts. During 2018,
the company included the adjustments discussed in (5) herein.
((13)) Free cash flow - The company defines free cash flow as cash flow from
operations less capital expenditures. Management believes this liquidity
measure gives investors an additional perspective on cash flow from on-going
operating activities in excess of amounts used for reinvestment.
((14)) Adjusted free cash flow - Because inclusion of the company's
post-retirement contributions and cost-reduction charges/reimbursements and
other payments in free cash flow may distort the visibility of the company's
ability to generate cash flow from its operations without the impact of these
non-operational costs, management believes that investors may be interested in
adjusted free cash flow, which provides free cash flow before these payments.
This liquidity measure was provided to analysts and investors in the form of
external guidance and is used by management to measure operating liquidity.
About Unisys
Unisys is a global information technology company that builds
high-performance, security-centric solutions for the most demanding businesses
and governments on Earth. Unisys offerings include security software and
services; digital transformation and workplace services; industry applications
and services; and innovative software operating environments for
high-intensity enterprise computing. For more information on how Unisys builds
better outcomes securely for its clients across the Government, Financial
Services and Commercial markets, visit www.unisys.com.
Forward-Looking Statements
Any statements contained in this release that are not historical facts are
forward-looking statements as defined in the Private Securities Litigation
Reform Act of 1995. Forward-looking statements include, but are not limited
to, any projections of earnings, revenues, annual contract value, total
contract value, new business ACV or TCV, backlog or other financial items; any
statements of the company's plans, strategies or objectives for future
operations; statements regarding future economic conditions or performance;
and any statements of belief or expectation. All forward-looking statements
rely on assumptions and are subject to various risks and uncertainties that
could cause actual results to differ materially from expectations. In
particular, statements concerning annual and total contract value are based,
in part, on the assumption that all options of the contracts (Federal only)
included in the calculation of such value will be exercised and that each of
those contracts will continue for their full contracted term. Risks and
uncertainties that could affect the company's future results include, but are
not limited to, the following: our ability to improve revenue and margins in
our services business; our ability to maintain our installed base and sell new
solutions in our technology business; the potential adverse effects of
aggressive competition in the information services and technology marketplace;
our significant pension obligations and required cash contributions and
requirements to make additional significant cash contributions to our defined
benefit pension plans; cybersecurity breaches could result in significant
costs and could harm our business and reputation; the potential adverse
effects of a U.S. Federal government shutdown; our ability to effectively
anticipate and respond to volatility and rapid technological innovation in our
industry; our ability to retain significant clients; our contracts may not be
as profitable as expected or provide the expected level of revenues; the risks
of doing business internationally when a significant portion of our revenue is
derived from international operations; our ability to access financing
markets; our ability to attract, motivate and retain experienced and
knowledgeable personnel in key positions; contracts with U.S. governmental
agencies may subject us to audits, criminal penalties, sanctions and other
expenses and fines; a significant disruption in our IT systems could adversely
affect our business and reputation; we may face damage to our reputation or
legal liability if our clients are not satisfied with our services or
products; the business and financial risk in implementing future acquisitions
or dispositions; the performance and capabilities of third parties with whom
we have commercial relationships; an involuntary termination of the company's
U.S. qualified defined benefit pension plan; the potential for intellectual
property infringement claims to be asserted against us or our clients; the
possibility that legal proceedings could affect our results of operations or
cash flow or may adversely affect our business or reputation; the adverse
effects of global economic conditions, acts of war, terrorism or natural
disasters and the company's consideration of all available information
following the end of the quarter and before the filing of the Form 10-K and
the possible impact of this subsequent event information on its financial
statements for the reporting period. Additional discussion of factors that
could affect the company's future results is contained in its periodic filings
with the Securities and Exchange Commission. The company assumes no obligation
to update any forward-looking statements.
RELEASE NO.: 0212/9645
Unisys and other Unisys products and services mentioned herein, as well as
their respective logos, are trademarks or registered trademarks of Unisys
Corporation. Any other brand or product referenced herein is acknowledged to
be a trademark or registered trademark of its respective holder.
UIS-Q
UNISYS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Millions, except per share data)
Three Months Ended Year Ended
December 31, December 31,
2018 2017 2018 2017
Revenue
Services $ 625.5 $ 592.6 $ 2,386.3 $ 2,328.2
Technology 135.4 152.2 438.7 413.6
760.9 744.8 2,825.0 2,741.8
Costs and expenses
Cost of revenue:
Services 550.5 514.1 * 2,010.5 2,033.8 *
Technology 32.0 43.9 * 128.2 160.3 *
582.5 558.0 * 2,138.7 2,194.1 *
Selling, general and administrative 95.8 97.7 * 370.3 411.9 *
Research and development 10.1 7.4 * 31.9 38.7 *
688.4 663.1 * 2,540.9 2,644.7 *
Operating profit 72.5 81.7 * 284.1 97.1 *
Interest expense 15.8 16.4 64.0 52.8
Other income (expense), net (18.6) (37.9) * (76.9) (116.4) *
Income (loss) before income taxes 38.1 27.4 143.2 (72.1)
Provision (benefit) for income taxes 13.9 (27.1) 64.3 (5.5)
Consolidated net income (loss) 24.2 54.5 78.9 (66.6)
Net income (loss) attributable to noncontrolling interests (0.8) 4.0 3.4 (1.3)
Net income (loss) attributable to Unisys Corporation $ 25.0 $ 50.5 $ 75.5 $ (65.3)
Earnings (loss) per share attributable to Unisys Corporation
Basic $ 0.49 $ 1.00 $ 1.48 $ (1.30)
Diluted $ 0.41 $ 0.76 $ 1.30 $ (1.30)
Shares used in the per share computations (in thousands):
Basic 51,028 50,475 50,946 50,409
Diluted 73,626 72,596 73,355 50,409
*Certain amounts have been reclassified to conform to the current-year presentation.
UNISYS CORPORATION
SEGMENT RESULTS
(Unaudited)
(Millions)
Total Eliminations Services Technology
Three Months Ended December 31, 2018
Customer revenue $ 760.9 $ - $ 625.5 $ 135.4
Intersegment - (6.4) - 6.4
Total revenue $ 760.9 $ (6.4) $ 625.5 $ 141.8
Gross profit percent 23.4% 15.0% 75.5%
Operating profit percent 9.5% 2.1% 58.6%
Three Months Ended December 31, 2017
Customer revenue $ 744.8 $ - $ 592.6 $ 152.2
Intersegment - (10.8) - 10.8
Total revenue $ 744.8 $ (10.8) $ 592.6 $ 163.0
Gross profit percent 25.1% * 18.1% 69.9%
Operating profit percent 11.0% * 4.8% 57.4%
Total Eliminations Services Technology
Year Ended December 31, 2018
Customer revenue $ 2,825.0 $ - $ 2,386.3 $ 438.7
Intersegment - (24.7) - 24.7
Total revenue $ 2,825.0 $ (24.7) $ 2,386.3 $ 463.4
Gross profit percent 24.3% 16.0% 69.4%
Operating profit percent 10.1% 2.8% 51.3%
Year Ended December 31, 2017
Customer revenue $ 2,741.8 $ - $ 2,328.2 $ 413.6
Intersegment - (25.9) - 25.9
Total revenue $ 2,741.8 $ (25.9) $ 2,328.2 $ 439.5
Gross profit percent 20.0% * 16.8% 59.4%
Operating profit percent 3.5% * 2.8% 38.8%
*Certain amounts have been reclassified to conform to the current-year presentation.
UNISYS CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Millions)
December 31, 2018 December 31, 2017
Assets
Current assets
Cash and cash equivalents $ 605.0 $ 733.9
Accounts receivable, net 509.2 503.3
Contract assets 29.7 -
Inventories:
Parts and finished equipment 14.0 13.6
Work in process and materials 13.3 12.5
Prepaid expenses and other current assets 130.2 126.2
Total 1,301.4 1,389.5
Properties 800.2 898.8
Less – Accumulated depreciation and amortization 678.9 756.3
Properties, net 121.3 142.5
Outsourcing assets, net 216.4 202.3
Marketable software, net 162.1 138.3
Prepaid postretirement assets 147.6 148.3
Deferred income taxes 109.3 119.9
Goodwill 177.8 180.8
Restricted cash 19.1 30.2
Other long-term assets 202.6 190.6
Total $ 2,457.6 $ 2,542.4
Liabilities and deficit
Current liabilities
Current maturities of long-term debt $ 10.0 $ 10.8
Accounts payable 268.9 241.8
Deferred revenue 294.4 327.5
Other accrued liabilities 350.0 391.5
Total 923.3 971.6
Long-term debt 642.8 633.9
Long-term postretirement liabilities 1,956.5 2,004.4
Long-term deferred revenue 157.2 159.0
Other long-term liabilities 77.4 100.0
Commitments and contingencies
Total deficit (1,299.6) (1,326.5)
Total $ 2,457.6 $ 2,542.4
UNISYS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Millions)
Year Ended
December 31,
2018 2017
Cash flows from operating activities
Consolidated net income (loss) $ 78.9 $ (66.6)
Adjustments to reconcile consolidated net income (loss) to net cash provided by operating activities:
Foreign currency transaction losses 7.4 21.7
Non-cash interest expense 10.5 9.5
Loss on debt extinguishment - 1.5
Employee stock compensation 13.2 11.2
Depreciation and amortization of properties 40.4 39.7
Depreciation and amortization of outsourcing assets 66.8 53.7
Amortization of marketable software 56.9 63.1
Other non-cash operating activities (4.8) 3.2
Loss on disposal of capital assets 0.8 5.0
Gain on the sale of properties (7.3) -
Postretirement contributions (138.7) (150.6) *
Postretirement expense 84.1 98.1 *
Decrease in deferred income taxes, net 8.2 3.4
Changes in operating assets and liabilities:
Receivables, net (50.5) 5.9
Inventories (5.5) 4.1
Accounts payable and other accrued liabilities (62.2) 48.6
Other liabilities (0.4) 42.4 *
Other assets (23.9) (27.5)
Net cash provided by operating activities 73.9 166.4
Cash flows from investing activities
Proceeds from investments 3,708.0 4,717.2
Purchases of investments (3,722.0) (4,692.4)
Investment in marketable software (80.7) (64.4)
Capital additions of properties (35.6) (25.8)
Capital additions of outsourcing assets (73.0) (86.3)
Net proceeds from sale of properties 19.2 -
Other (0.9) (0.8)
Net cash used for investing activities (185.0) (152.5)
Cash flows from financing activities
Payments of long-term debt (2.3) (107.5)
Financing fees (0.2) (1.1)
Proceeds from issuance of long-term debt - 452.9
Issuance costs related to long-term debt - (12.1)
Other (2.3) (2.3)
Net cash (used for) provided by financing activities (4.8) 329.9
Effect of exchange rate changes on cash, cash equivalents and restricted cash (24.1) 19.2
(Decrease) increase in cash, cash equivalents and restricted cash (140.0) 363.0
Cash, cash equivalents and restricted cash, beginning of period 764.1 401.1
Cash, cash equivalents and restricted cash, end of period $ 624.1 $ 764.1
* Certain amounts have been reclassified to conform to the current-year presentation.
UNISYS CORPORATION
RECONCILIATIONS OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES
(Unaudited)
(Millions, except per share data)
Three Months Ended Year Ended
December 31, December 31,
2018 2017 2018 2017
GAAP net income (loss) attributable to Unisys Corporation common $ 25.0 $ 50.5 $ 75.5 $ (65.3)
shareholders
Topic 606 adjustment: pretax - - (53.0) -
tax - - (5.3) -
net of tax - - (47.7) -
Postretirement expense: pretax 25.9 23.6 * 84.1 98.1 *
tax (1.1) 0.6 (0.3) 2.3
net of tax 24.8 24.2 * 83.8 100.4 *
Cost reduction and other expense: pretax 16.5 49.4 10.3 149.9
tax 1.8 2.0 1.6 12.2
net of tax 14.7 47.4 8.7 137.7
minority interest 2.0 - 3.5 (11.1)
net of minority interest 16.7 47.4 12.2 126.6
Non-GAAP net income attributable to Unisys Corporation common 66.5 122.1 * 123.8 161.7 *
shareholders
Add interest expense on convertible notes 5.0 4.8 19.6 19.0
Non-GAAP net income attributable to Unisys Corporation for diluted earnings $ 71.5 $ 126.9 * $ 143.4 $ 180.7 *
per share
Weighted average shares (thousands) 51,028 50,475 50,946 50,409
Plus incremental shares from assumed conversion:
Employee stock plans 730 253 541 295
Convertible notes 21,868 21,868 21,868 21,868
Non-GAAP adjusted weighted average shares 73,626 72,596 73,355 72,572
Diluted earnings (loss) per share
GAAP basis
GAAP net income (loss) attributable to Unisys Corporation for diluted earnings per share $ 30.0 $ 55.3 $ 95.1 $ (65.3)
Divided by adjusted weighted average shares 73,626 72,596 73,355 50,409
GAAP diluted earnings (loss) per share $ 0.41 $ 0.76 $ 1.30 $ (1.30)
Non-GAAP basis
Non-GAAP net income attributable to Unisys Corporation for diluted earnings per share $ 71.5 $ 126.9 * $ 143.4 $ 180.7 *
Divided by Non-GAAP adjusted weighted average shares 73,626 72,596 73,355 72,572
Non-GAAP diluted earnings per share $ 0.97 $ 1.75 * $ 1.95 $ 2.49 *
* Certain amounts have been reclassified to conform to the current-year presentation.
UNISYS CORPORATION
RECONCILIATIONS OF GAAP TO NON-GAAP
(Unaudited)
(Millions)
FREE CASH FLOW
Three Months Ended Year Ended
December 31, December 31,
2018 2017 2018 2017
Cash used for operations $ 151.3 $ 202.7 $ 73.9 $ 166.4
Additions to marketable software (19.0) (17.8) (80.7) (64.4)
Additions to properties (10.6) (4.0) (35.6) (25.8)
Additions to outsourcing assets (18.6) (26.2) (73.0) (86.3)
Free cash flow 103.1 154.7 (115.4) (10.1)
Postretirement funding 14.2 31.4 * 138.7 150.6 *
Cost reduction and other payments, net of reimbursements 6.5 21.3 38.7 70.3
Adjusted free cash flow $ 123.8 $ 207.4 * $ 62.0 $ 210.8 *
* Certain amounts have been reclassified to conform to the current-year presentation.
UNISYS CORPORATION
RECONCILIATIONS OF GAAP TO NON-GAAP
(Unaudited)
(Millions)
EBITDA
Three Months Ended Year Ended
December 31, December 31,
2018 2017 2018 2017
Net income (loss) attributable to Unisys Corporation $ 25.0 $ 50.5 $ 75.5 $ (65.3)
common shareholders
Net income (loss) attributable to noncontrolling interests (0.8) 4.0 3.4 (1.3)
Interest expense, net of interest income of $2.7, $2.7, $11.7, $9.9 respectively** 13.1 13.7 52.3 42.9
Provision (benefit) for income taxes 13.9 (27.1) 64.3 (5.5)
Depreciation 27.3 24.5 107.2 93.4
Amortization 14.1 16.0 56.9 63.1
EBITDA $ 92.6 $ 81.6 $ 359.6 $ 127.3
Topic 606 adjustment $ - $ - $ (53.0) $ -
Postretirement expense 25.9 23.6 * 84.1 98.1 *
Cost reduction and other expense*** 16.5 49.1 10.3 149.6
Non-cash share based expense 3.2 2.6 13.2 11.2
Other (income) expense adjustment**** (3.7) 4.0 8.3 18.9
Adjusted EBITDA $ 134.5 $ 160.9 * $ 422.5 $ 405.1 *
*Certain amounts have been reclassified to conform to the current-year presentation.
**Included in other (income) expense, net on the consolidated statements of income
***Reduced for depreciation and amortization included above
****Other (income) expense, net as reported on the consolidated statements of income less postretirement expense, interest income and items included in cost reduction and other expense
UNISYS CORPORATION
RECONCILIATIONS OF GAAP SEGMENT REPORTING TO NON-GAAP SEGMENT REPORTING
(Unaudited)
(Millions)
Three Months Ended Year Ended
Services Segment December 31, December 31,
2018 2017 2018 2017
GAAP total revenue $ 625.5 $ 592.6 $ 2,386.3 $ 2,328.2
Restructuring reimbursement (6.3) - (9.4) -
Non-GAAP revenue $ 619.2 $ 592.6 $ 2,376.9 $ 2,328.2
GAAP gross margin $ 93.9 $ 107.5 $ 380.8 $ 390.3
Restructuring reimbursement (6.3) - (9.4) -
Non-GAAP gross margin $ 87.6 $ 107.5 $ 371.4 $ 390.3
GAAP operating profit $ 13.3 $ 28.2 $ 67.6 $ 64.8
Restructuring reimbursement (6.3) - (9.4) -
Non-GAAP operating profit $ 7.0 $ 28.2 $ 58.2 $ 64.8
GAAP gross margin % 15.0% 18.1% 16.0% 16.8%
Non-GAAP gross margin % 14.1% 18.1% 15.6% 16.8%
GAAP operating profit % 2.1% 4.8% 2.8% 2.8%
Non-GAAP operating profit % 1.1% 4.8% 2.4% 2.8%
Three Months Ended Year Ended
Technology Segment December 31, December 31,
2018 2017 2018 2017
GAAP total revenue $ 141.8 $ 163.0 $ 463.4 $ 439.5
Topic 606 impact - - (53.0) -
Non-GAAP revenue $ 141.8 $ 163.0 $ 410.4 $ 439.5
GAAP gross margin $ 107.1 $ 113.9 $ 321.5 $ 260.9
Topic 606 impact - - (53.0) -
Non-GAAP gross margin $ 107.1 $ 113.9 $ 268.5 $ 260.9
GAAP operating profit $ 83.1 $ 93.6 $ 237.8 $ 170.6
Topic 606 impact - - (53.0) -
Non-GAAP operating profit $ 83.1 $ 93.6 $ 184.8 $ 170.6
GAAP gross margin % 75.5% 69.9% 69.4% 59.4%
Non-GAAP gross margin % 75.5% 69.9% 65.4% 59.4%
GAAP operating profit % 58.6% 57.4% 51.3% 38.8%
Non-GAAP operating profit % 58.6% 57.4% 45.0% 38.8%
Three Months Ended Year Ended
Total Unisys December 31, December 31,
2018 2017 2018 2017
GAAP total revenue $ 760.9 $ 744.8 $ 2,825.0 $ 2,741.8
Topic 606 impact - - (53.0) -
Restructuring reimbursement (6.3) - (9.4) -
Non-GAAP revenue $ 754.6 $ 744.8 $ 2,762.6 $ 2,741.8
GAAP gross margin $ 178.4 $ 186.8 * $ 686.3 $ 547.7 *
Topic 606 impact - - (53.0) -
Restructuring reimbursement (6.3) - (9.4) -
Postretirement expense - 0.6 * - 3.7 *
Cost-reduction expense 22.3 29.2 18.1 100.0
Non-GAAP gross margin $ 194.4 $ 216.6 * $ 642.0 $ 651.4 *
GAAP operating profit 72.5 $ 81.7 * $ 284.1 $ 97.1 *
Topic 606 impact - - (53.0) -
Restructuring reimbursement (6.3) - (9.4) -
Postretirement expense 0.9 1.0 * 3.8 5.6 *
Cost-reduction expense 22.8 35.4 19.7 135.0
Non-GAAP operating profit $ 89.9 $ 118.1 * $ 245.2 $ 237.7 *
GAAP gross margin % 23.4% 25.1% * 24.3% 20.0% *
Non-GAAP gross margin % 25.8% 29.1% * 23.2% 23.8% *
GAAP operating profit % 9.5% 11.0% * 10.1% 3.5% *
Non-GAAP operating profit % 11.9% 15.9% * 8.9% 8.7% *
*Certain amounts have been reclassified to conform to the current-year presentation.
CONTACT: Investors: Courtney Holben, Unisys, 215-986-3379,
courtney.holben@unisys.com; Media: John Clendening, Unisys, 214-403-1981,
john.clendening@unisys.com
Copyright (c) 2019 PR Newswire Association,LLC. All Rights ReservedRecent news on Unisys
See all newsREG - Official List - Removal-UNISYS CORPORATION
AnnouncementREG - Stock Exch Notice Unisys Corp - Cancellation - UNISYS CORPORATION
AnnouncementREG-Unisys Corporation: Unisys Announces 2Q24 Results
AnnouncementREG-Unisys Corporation: Unisys Announces 1Q24 Results
AnnouncementREG-Unisys Corporation: Unisys Announces 4Q and Full-Year 2023 Results
Announcement